I think the finished product is like a pen (small hand held) with no moving parts.
The prototype can be bigger.
A color sensor is small.
I see a color sensor to look at money. + White LED to light the money. + Switch to know when the product is pushed down on the money.
Push down on the money, LED turns on, sensor starts reading. Move across the money. Lift up to stop.
Measure the color maybe 50 time/second. 50 to 500 readings.
Most of the color sensors have Red, Green, Blue outputs. If we have 100 readings, add up and divide/100 to find the average.
Now we might have numbers like R=123, G=234, B=54. But very old dirty money might read 1/2 as bright. R=61, G=118. B=27.
So maybe we need to find the ratio between R, G, and B. R=1, G=2, B=0.5
For testing the sensor can be connected to a PC. Many scans must be taken. The question is can you get good data.
Do all "1" give numbers that are close together and different than "2" and different than "5".
This is a very simple test. It you do not get good data I can find better tests that require more computer power.